Yahoo Cutting Global Staff 10% Under New CEO, Carol Bartz – Could Push Microsoft Sale

With the recent announcement of Yahoo Inc’s new Chief Executive Carol Bartz, formerly of Autodesk, Inc. Many industry experts see this as a significant move towards paving the way for the Internet company to make major decisions on issues including a sale or search deal with Microsoft Corp.

The leadership change coupled with Yahoo’s ongoing move towards cutting about 10% of its worldwide staff appears to signal big changes in direction for the struggling company. Today, Yahoo spokesman Brad Williams announced further reductions in its operations, cutting about 52 staff from its 251-strong French offices.

Engineering staff are taking a big hit from the restructuring, as Yahoo’s French sites carry proportionally more engineers than other locations. “The category of engineers is the most affected by cuts at the global level”, said the company. The cuts will come from both of Yahoo’s French sites, in Paris and Grenoble.

This is as bittersweet as it was in September, when Yahoo made a big song and dance about opening an R&D facility in the latter location, an Alps town, at a lavish ceremony involving French government ministers. Engineers at the site were too concentrated on “key strategic priorities” – internationalizing Yahoo Answers and developing search, specifically semantic search – on the site that was effectively the HQ of shopping comparison-site Kelkoo, which Yahoo recently offloaded at a big loss.

But a spokesperson called this “a plan to safeguard employment” and said six positions would be created. Separately, Yahoo is also dropping its Content Match contextual-ad technology in some parts of Europe.

Forced to close operations and shed staff during Microsoft’s courtship, Yahoo last year began moving its European HQ from London to cheaper Geneva. In what has been an 18-month operation to shrink the outfit, it has closed offices in Dusseldorf, Hamburg, Stockholm, Amsterdam, Oslo, and Copenhagen.

While Yahoo enjoys only a 16 percent share of the US search market against Google’s 64 percent (according to Nielson online, Nov 08), it can only hope for that in the UK, where it commands just six percent of searches against Google’s 81 percent. Yahoo must either roll up its sleeves and develop its way back into the search contention, or get out of the market by outsourcing its services.

The question remains will Yahoo’s new CEO, Carol Bartz technical track record mean a revitalization of the struggling company ?